Jan 3 A U.S. federal appeals court has
reinstated an antitrust case against Dean Foods Co
alleging it conspired to restrict competition for bottled milk
in the southeast United States.
The Cincinnati-based U.S. 6th Circuit Court of Appeals found
on Friday that a lower court erred when it ruled a class of
retailers could not establish proof of their injuries or the
relevant geographic antitrust market.
The court remanded the case to the district court for
The case stems from the 2001 merger between Suiza Foods
Corp, then the largest U.S. milk processor, and Dean Foods, the
second largest. As part of the agreement, the merged company
known as Dean Foods, divested assets to steer clear of antitrust
concerns by the U.S. Justice Department. Those assets helped
create a new competitor called National Dairy Holdings.
But a class action, led by Food Lion and Fidel Breto,
alleged that Dean Foods and National Dairy Holdings entered into
a conspiracy not to compete in states throughout the Southeast.
The plaintiffs alleged the two companies were linked by the
Dairy Farmers of America, a large marketing cooperative. Before
the merger, DFA was Suiza's main provider, while Dean obtained
its milk from independent producers.
After the merger, DFA took a 50 percent stake in National
Dairy Holdings. But according to the plaintiffs, DFA also
obtained guarantees from Dean Foods to supply milk to all of its
bottling plants, including those supplied by independent
producers before the merger.
U.S. District Judge J. Ronnie Greer of Greeneville, Tenn.,
dismissed all five counts of the retailers' complaint.
The retailers appealed one of the counts of violating the
Sherman Antitrust Act to the 6th Circuit.
A spokesman for Deans Foods said in a statement the company
was disappointed with the court decision.
"We remain confident that we have operated lawfully and
fairly at all times in the Southeast," he said.
Neil Gilman, an attorney for the retailers, said he was
pleased with the decision and looked forward to going to trial.
Dean Foods previously paid $140 million to settle a separate
antitrust case over raw milk in the Southeast brought by a group
of dairy farmers.
The appeal is Food Lion, et al v. Dean Foods Co, et al, U.S.
6th Circuit Court of Appeals, No. 12-5457.